Correlation Between Enbridge Pref and Source Rock
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By analyzing existing cross correlation between Enbridge Pref 5 and Source Rock Royalties, you can compare the effects of market volatilities on Enbridge Pref and Source Rock and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Enbridge Pref with a short position of Source Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Source Rock.
Diversification Opportunities for Enbridge Pref and Source Rock
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enbridge and Source is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 5 and Source Rock Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Source Rock Royalties and Enbridge Pref is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Enbridge Pref 5 are associated (or correlated) with Source Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Source Rock Royalties has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Source Rock go up and down completely randomly.
Pair Corralation between Enbridge Pref and Source Rock
Assuming the 90 days trading horizon Enbridge Pref 5 is expected to generate 0.4 times more return on investment than Source Rock. However, Enbridge Pref 5 is 2.49 times less risky than Source Rock. It trades about 0.11 of its potential returns per unit of risk. Source Rock Royalties is currently generating about 0.04 per unit of risk. If you would invest 1,983 in Enbridge Pref 5 on September 14, 2024 and sell it today you would earn a total of 408.00 from holding Enbridge Pref 5 or generate 20.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.88% |
| Values | Daily Returns |
Enbridge Pref 5 vs. Source Rock Royalties
Performance |
| Timeline |
| Enbridge Pref 5 |
| Source Rock Royalties |
Enbridge Pref and Source Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Source Rock
The main advantage of trading using opposite Enbridge Pref and Source Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, Source Rock can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Source Rock will offset losses from the drop in Source Rock's long position.| Enbridge Pref vs. Overactive Media Corp | Enbridge Pref vs. Postmedia Network Canada | Enbridge Pref vs. Richelieu Hardware | Enbridge Pref vs. East Side Games |
| Source Rock vs. Enbridge Pref 5 | Source Rock vs. Enbridge Pref 11 | Source Rock vs. Enbridge Pref L | Source Rock vs. E Split Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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